Campus debit cards can carry downsides

http://www.washingtonpost.com/business/campus-debit-cards-can-carry-downsides/2012/06/01/gJQAhleo9U_story.html

As high school graduates begin preparing for college, many families are faced with the task of funding their college-age kid. While credit cards are pretty useful, they can also easily be abused. So many turn to debit cards-- it's less risky, a better tool for money management. It's also easy to sign up for debit cards through the university.

However, many of these schools are going into business with major financial companies, meaning that kids wanting to get debit/credit cards have to pay numerous fees to maintain the use of the card. The fees can be so much that it eats into financial aid packages. There's been a trend of state schools acting more in the interest of the school than in its students. Schools across the nation are experiencing huge cuts in state funding, meaning that they have to resort to finding revenue elsewhere, such as these partnerships.

These school banks charge huge overdraft fees, charge when money is deposited or withdrawn at ATMs. Students who own credit cards are charged less than those with debit cards. Checking balances can also cost money.

Some insist that fees are the result of using online banking, but the fact is that students can find non-school-affiliated banking elsewhere that is virtually free of charges.


Since we're all going to school in the fall, I thought this was interesting. I'm currently a member of a local credit union, so it'll be interesting to see what type of banking situation I'll have down in Charlottesville. It's useful to know that hidden fees exist so now I'll be more wary. The article was useful and informative.